In National Federation of Independent Business v. Sebelius, the individual mandate of the Affordable Care Act was upheld under Congress’s taxing power rather than pursuant to the Commerce Clause. Although politically expedient, the salutary effect of the decision came at the expense of an undefined expansion of the taxing power. The Congressional Research Service concluded that, after Sebelius, the limits of the Congressional taxing power are unknown. Accordingly, the Congressional staff attorneys listed prior cases that ostensibly limit the taxing power and then predicted that future cases will be needed to define the limits going forward.

This article explains in detail why the health insurance penalty at issue in Sebelius was, in fact, a type of “capitation” tax.

Comments

Try to construct a tax rate schedule with sane marginal rates which produces the same result as the ACA penalty. You can't. It's mathematically impossible. That proves that the penalty is not a tax on income. It starts as a flat amount on a personal decision then adds an adjustment based on income. That flat amount is a capitation tax.